India recently took another step in showcasing its potential for global leadership in the field of sustainable development by hosting the 16th International Energy Forum – Ministerial Conference. The event was held in New Delhi from 10th to 12th April 2018 on “The future of global energy security – Transition, Technology, Trade, and Investment”. This was the second major event on energy hosted by India in recent time. The International Solar Alliance Summit was held in March, where India for the first time turned into a headquarters for the global solar alliance.

IEF is the world’s largest platform for energy ministers. The member countries account for 90% of global supply and demand in energy. India has been a permanent member of the IEF Executive Board since its set up. This time, energy ministers from 50 countries, CEOs of 30 MNCs, Heads of 12 International Organizations and over 500 guests took part in the conference.

It is important to understand the context of the conference. The energy sector is complex and has played a key role in making and breaking of economies in the last 150 years. The present world energy trilemma is the challenge to provide secure, affordable, environmentally sensitive energy to all against the backdrop of is the rapid technological disruption.

We live in a time of increasing uncertainties, shifting roles and emerging configurations. In the recent past, 195 countries in December 2015 signed the Paris agreement on environmental measures. The US withdrew in 2017. Further, the disruption made by the discovery of shale oil caused a glut in the industry, forcing the OPEC and 10 non-OPEC countries to call for a production cut. The agreement is going to end in 2018. The shale oil boom might continue and these countries could again go for a production cut to avoid crude oil glut in the market. Taking these into consideration, a conference like this is essential for a dialogue between politics, economics, and markets. This is also a platform for G2G, G2B, B2B partnerships.

The conference was hosted by India with China and South Korea as co-hosts. Prime Minister Narendra Modi and Dharmendra Pradhan, Minister for Petroleum and Natural Gas & Skill Development and Entrepreneurship inaugurated the conference. Prime Minister Narendra Modi, in his inaugural address, stressed on energy access, efficiency, sustainability, and security. He also mentioned about the need for a supportive relationship between producer and consumer countries. Modi said India would be a key driver of global energy demand in next 25 years. The ministerial dialogue for informal discussions on these was structured in four thematic plenary sessions and four parallel roundtables.

India presented that energy would be a key engine for its economic growth and mentioned it’s ambition to generate 175 GW of clean energy by 2022. India signaled that it is open for investments in the Oil and Gas sector. Gas trading hubs, to control the gas pricing across the nation would become functional by end of 2018. India is also developing energy infrastructure in its neighboring countries.

Informal meetings at policy and technical levels took place, with an aim to improve policy and investment decisions through increased knowledge and experience sharing. India along with China, responsible for 50% of growth in global energy demand, called for reasonable pricing, in the response to the Asian premium that makes us pay 6$ per barrel more than other western countries. Saudi Aramco, one of the world’s largest oil company partners with IOCL, HPCL, BPCL to set up world’s largest refinery in Ratnagiri, Maharashtra with 44 billion USD (3 lakh crores) investment.

As solar and wind tariffs of India are cheap at Rs. 2.44 per kWh, Bangladesh expressed its interests to buy at least 2000MW of the solar power set up in Gujarat and Rajasthan. Zambia expressed its interests to learn from India’s expertise in renewable energy and also said that China with its effective pricing and low-interest rates is able to win their bids. The Iranian oil minister cautioned the world against politicizing the global oil market, noted that adopting such policy will harm not only suppliers but also customers. ONGC Videsh Ltd has recently cut a deal with Iran over Farzad-B field. ONGC also expressed that it will produce gas from KG Basin by end 2019 and oil by 2021. UAE is exploring Hydrogen for its future energy strategy. The valedictory address was given by the Minister of External Affairs Sushma Swaraj.

Energy is one of the prime drivers of economic and social development. Of the top 20 in the Fortune 500, seven are oil companies. The oil sector had played a crucial role in making countries powerful. Because of raising environment measures and technology disruptions every decade, organizations like IEA, OPEC, IEF are continuously working to stabilize these disruptions. India with its high GDP growth rate might be responsible for one-third of the global growth in energy demand till 2030 and is also trying to project itself as a global leader for sustainable growth. We wish to see India fulfilling these promises both to the Indian public and the world. In a world where, Energy, Infrastructure, and Connectivity are the key players, India seems to be making the right moves.

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The author has an interest in issues concerning socio-economic development through global energy dynamics. He has built prototypes for Road Power Generation and published the same. He worked as a consultant for global energy MNCs through NTT Data, before joining Vision India Foundation, a public-policy think tank.

Four Things You Should Know About Battery Storage

The global
energy landscape is undergoing a major transformation. This year’s Innovate4Climate (I4C) will have a priority focus on
battery storage, helping to identify ways to overcome the technology, policy
and financing barriers to deploy batteries widely and close the global energy
storage gap.

Here are
four things about battery storage that are worth knowing.

First, energy storage is key to realizing the potential
of clean energy

Renewable sources of energy, mainly solar and wind,
are getting cheaper and easier to deploy in developing countries, helping
expand energy access, aiding global efforts to reach the Sustainable Development Goal on
Energy (SDG7) and to mitigate climate
change. But solar and wind energy are variable by nature, making it necessary
to have an at-scale, tailored solution to store the electricity they produce
and use it when it is needed most.

Batteries are a key part of the solution. However, the
unique requirements of developing countries’ grids are not yet fully considered
in the current market for battery storage – even though these countries may
have the largest potential for battery deployment.

Today’s market for batteries is driven mainly by the
electric vehicles industry and most mainstream technologies cannot provide long
duration storage nor withstand harsh climatic conditions and have limited
operation and maintenance capacity. Many developing countries also have limited
access to other flexibility options such as natural gas generation or increased
transmission capacity.

Second, boosting battery storage is a major
opportunity

Global demand for battery storage is expected to reach
2,800 gigawatt hours (GWh) by 2040 – the equivalent of storing a little more
than half of all the renewable energy generated [today] around the world in a
day. Power systems around the world will need many exponentially more storage
capacity by 2050 to integrate even more solar and wind energy into the
electricity grid.

For battery storage to become an at-scale enabler for
the storage and deployment of clean energy, it will be imperative to accelerate
the innovation in and deployment of new technologies and their applications. It
will also be important to foster the right regulatory and policy environments
and procurement practices to drive down the cost of batteries at scale and to
ensure financial arrangements that will create confidence in cost recovery for
developers. It will also be essential to find ways to ensure sustainability in
the battery value chain, safe working conditions and environmentally
responsible recycling.

With the right enabling environment and the innovative
use of batteries, it will be possible to help developing countries build the
flexible energy systems of the future and deliver electricity to the 1 billion
people who live without it even today.

Third, battery storage can be transformational for the
clean energy landscape in developing countries

Today, battery technology is not widely deployed in
large-scale energy projects in developing countries. The gap is particularly
acute in Sub-Saharan Africa, where nearly 600 million people still live without
access to reliable and affordable electricity, despite the region’s significant
wind and solar power potential and burgeoning energy demand. Catalyzing new
markets will be key to drive down costs for batteries and make it a viable
energy storage solution in Africa.

Already, there is tremendous demand in the region
today for energy solutions that do not just boost the uptake of clean energy,
but also help stabilize and strengthen existing electricity grids and aid the
global push to adopt more clean energy and fight against climate change.

Fourth, the World Bank is stepping up its catalytic
role in boosting battery storage solutions

There is a clear need to catalyze a new market for
batteries and other storage solutions that are suitable for electricity grids
for a variety of applications and deployable on a large scale. The World Bank
is already taking steps to address this challenge. In 2018, the World Bank
Group announced a $1 billion
global battery storage program, aiming to raise $4 billion more in private and public funds to create
markets and help drive down prices for batteries, so it can be deployed as an
affordable and at-scale solution in middle-income and developing countries.

By 2025, the World Bank expects to finance 17.5 GWh of
battery storage – more than triple the 4-5 GWh currently installed in
developing countries. With the right solutions, it can be possible to build
large-scale renewable energy projects with significant energy storage
components, deploy batteries to stabilize power grids in countries with weak
infrastructure, and increase off-grid access to communities that are ready for
clean energy with storage.

The World Bank has already financed over 15% of
grid-related battery storage in various stages of deployment in developing
countries to date.

In Haiti, a combined solar and battery storage project
will ultimately provide electricity to 800,000 people and 10,000 schools,
clinics and other institutions. An emergency solar and battery storage power
plant is being built in the Gambia, as are mini-grids in several island states
to boost their resilience.

In India, a joint WB-IFC team is developing one of the
largest hybrid solar, wind and storage power plants in the world, while in
South Africa, the World Bank is helping develop 1.44 gigawatt-hours of battery
storage capacity, which is expected to be the largest project of its kind in
Sub-Saharan Africa.

Related

Driving a Smarter Future

Today the average car runs on fossil fuels, but growing pressure for
climate action, falling battery costs, and concerns about air pollution in
cities, has given life to the once “over-priced” and neglected electric
vehicle.

With many new electric vehicles (EV) now out-performing their fossil-powered
counterparts’ capabilities on the road, energy planners are looking to bring
innovation to the garage — 95% of a car’s time is spent parked. The result is
that with careful planning and the right infrastructure in place, parked and
plugged-in EVs could be the battery banks of the future, stabilising electric
grids powered by wind and solar energy.

Today the average car runs on fossil fuels, but growing pressure for
climate action, falling battery costs, and concerns about air pollution in cities,
has given life to the once “over-priced” and neglected electric vehicle.

With many new electric vehicles (EV) now out-performing their
fossil-powered counterparts’ capabilities on the road, energy planners are
looking to bring innovation to the garage — 95% of a car’s time is spent
parked. The result is that with careful planning and the right infrastructure
in place, parked and plugged-in EVs could be the battery banks of the future,
stabilising electric grids powered by wind and solar energy.

Advanced forms of smart charging

An advanced smart charging approach, called Vehicle-to-Grid (V2G),
allows EVs not to just withdraw electricity from the grid, but to also inject
electricity back to the grid. V2G technology may create a business case for car
owners, via aggregators (PDF), to provide ancillary services to the grid. However, to be
attractive for car owners, smart charging must satisfy the mobility needs,
meaning cars should be charged when needed, at the lowest cost, and owners
should possibly be remunerated for providing services to the grid. Policy
instruments, such as rebates for the installation of smart charging points as
well as time-of-use
tariffs (PDF), may incentivise a wide deployment
of smart charging.

“We’ve seen this tested in the UK, Netherlands and Denmark,” Boshell
says. “For example, since 2016, Nissan, Enel and Nuvve have partnered and
worked on an energy management solution that allows vehicle owners and energy
users to operate as individual energy hubs. Their two pilot projects in Denmark
and the UK have allowed owners of Nissan EVs to earn money by sending power to
the grid through Enel’s bidirectional chargers.”

Perfect
solution?

While EVs have a lot to offer towards accelerating variable renewable
energy deployment, their uptake also brings technical challenges that need to be
overcome.

IRENA analysis suggests uncontrolled and simultaneous charging of EVs
could significantly increase congestion in power systems and peak load.
Resulting in limitations to increase the share of solar PV and wind in power
systems, and the need for additional investment costs in electrical
infrastructure in form of replacing and additional cables, transformers,
switchgears, etc., respectively.

An increase in autonomous and ‘mobility-as-a-service’ driving — i.e.
innovations for car-sharing or those that would allow your car to taxi
strangers when you are not using it — could disrupt the potential availability
of grid-stabilising plugged-in EVs, as batteries will be connected and
available to the grid less often.

Impact of charging according to type

It has also become clear that fast and ultra-fast charging are a
priority for the mobility sector, however, slow charging is actually better
suited for smart charging, as batteries are connected and available to the grid
longer. For slow charging, locating charging infrastructure at home and at the
workplace is critical, an aspect to be considered during infrastructure
planning. Fast and ultra-fast charging may increase the peak demand stress on
local grids. Solutions such as battery swapping, charging stations with buffer
storage, and night EV fleet charging, might become necessary, in combination
with fast and ultra-fast charging, to avoid high infrastructure investments.

To learn more about smart charging, read IRENA’s Innovation
Outlook: smart charging for electric vehicles. The report explores the degree of complementarity potential between
variable renewable energy sources and EVs, and considers how this potential
could be tapped through smart charging between now and mid-century, and the
possible impact of the expected mobility disruptions in the coming two to three
decades.

Related

What may cause Oil prices to fall?

Oil prices have rallied a whopping 30 percent this year. Among other factors, OPEC’s commitment to reduce output,
geopolitical flash-points like the brewing war in Libya, slowdown in shale production and optimism in U.S. and China trade war
have all added to the increase. The recent rally being sparked by cancellation of waivers granted to countries importing oil form Iran has taken prices to new
highs.

However, one might question the
sustainability of this rally by pointing out few bearish factors that might
cause a correction, or possibly, a fall in oil prices. The recent sharp slide
shows the presence of tail-risks!

Libya produces just over 1 percent of world oil output at 1.1 million barrels, which is indeed not of such
a magnitude as to dramatically affect global oil supplies. What is important is
the market reaction to every geopolitical event that occurs in the Middle East
given the intricate alliances and therefore the increasing chances of other
countries jumping in with a national event climaxing into a regional affair.

Matters in Libya got serious as an airstrike was carried out on
the only functioning airport in the country a few days ago. Khalifa Haftar who
heads Libyan National Army has assumed responsibility for the strike. However,
UN and G7 have urged to restore peace in Tripoli. Russia has categorically said to use “all available means” while U.S.’ Pompeo called for “an immediate halt” of atrocities in Libya.

The fighting has been far from locations
that hold oil but the overall sentiment is that of fear which is understandable
as this happens in parallel to a steep decline in Venezuelan production,
touching multi-year low of 740,000 bpd. However, as international
forces play their part we might expect a de-escalation in the Libyan war — as
it has happened before.

Besides the chances of an alleviation of
hostilities in Libya, concerns pertaining to global economic growth, and
thereof demand for oil, have still not disappeared. The U.S. treasury yield,
one of the best measures to predict a future slowdown (recession), inverted last month; first time since 2007. If this does not raise doubts over the global
economic health then the very recent announcement by International Monetary Fund (IMF) who has slashed its outlook for
world economic growth to its lowest since the last financial crisis. According
to the Fund the global economy will grow 3.3 percent this year down from 3.5
percent that predicted three months ago.

image: Bloomberg

Then there is Trump, whose declaration of
Iran’s IRGC as a terrorist organization might increase the likelihoods of yet another spate of heated rhetoric
between the arch-rivals. But if he is genuinely irked by higher oil prices as
his tweets at times show and if he thinks that higher gasoline prices can hurt his political capital then this will certainly have a bearish
effect on the markets as observers take a sigh regarding the mounting, yet
unsubstantiated, concern over supply.

One of the factors that contributed most
to the recent rally was OPEC’s unwavering commitment to its production cuts.
The organization’s output fell to its lowest in a year at 30.23 million barrels per day in February 2019, its lowest in four years. But the
question remains for how long can these cuts go on? Last month it was reported the Kingdom of Saudi Arabia had admitted that they need oil at $70 for
a balanced budget while estimates from IMF claims that the level for a budget break-even are even higher: $80-$85. We
should not forget Trump and his tweets in this regard as well. Whenever prices
have inched up from a certain threshold POTUS’ tweet forced the market to
correct themselves (save the last time). One of the key Russian officials who
made the deal with OPEC possible recently signaled that Russia may urge others to increase production as they meet in the
last week of June this year. While this is not a confirmation that others will
agree but it certainly shows that one of the three largest oil producers in the
world does feel that markets are now almost balanced and the cuts are not
needed further.

Now with the recent cancellation of
waivers we should expect U.S. to press KSA to increase production to offset the
lost barrels and stabilize the prices.

Finally stoking fears of an impending
supply crunch (a bullish factor) is the supposed slowdown in U.S. Shale production.
But the facts might be a tad different. Few weeks ago U.S. added 15 oil rigs in one day, a very strong number indeed-this comes after a decline of
streak of six consecutive weeks. According to different estimates the shale
producers are fine with prices anywhere between $48 to $54 and the recent rise
in prices has certainly helped. Well Fargo Investment Institute Laforge said that higher prices will result in “extra U.S. oil production in coming
months”. Albeit, U.S.’ average daily production has decreased a bit but it doesn’t mean that the shale producers cannot bring back
production online again. Prices are very conducive for it.

So if you think that prices will continue
to head higher, think again. Following graph shows that oil had entered the overbought territory few
days back–hence the recent slide.

Therefore, If the war in Libya settles
down (and there is a strong possibility that it will); rumors of a production
increase making its way into investors’ and traders’ mind (as it already have) and
global economy continue to struggle in order to gain a strong footing — the
chances are oil will fall again. The current rally might last for some-time
but, like always, beware not to buy too high.